When it comes to choosing a great place to live, Aurora may just fit the bill. Situated in the Greater Toronto Area within the area of the central York region, residents have recognized Aurora’s appeal and chosen to call this municipality home.

With a host of local amenities as well as access to outdoor recreational activities, residents can take advantage of an enviable lifestyle. Great transportation links and proximity to central Toronto also add to Aurora’s appeal.

The housing sector in Aurora has reflected the desirability of the area. Just as in other cities across the Province, housing prices have dramatically increased through the height of the pandemic in 2020 and as we enter the fourth quarter of 2021.

According to the September Aurora housing report, the price of an average three-bedroom single detached property has risen to $1,169,547. With limited inventory, houses continue to sell very quickly with an average of just 14 days on the market from listing to sale.

Although these numbers are encouraging for Aurora homeowners, if credit is an issue it may be more difficult to utilize newfound equity to take out a second mortgage

What is the solution? It may be advisable to seek the help of an established and experienced Aurora-based private lender. Private lenders will be able to offer a range of second mortgage loan options to existing Aurora homeowners despite poor credit, high debt, or limited household income.

What Types of Lenders are There In Aurora?

Many homeowners that are looking to tap into the equity in their home turn to the banks for second mortgage loan options. Although the banks do offer a range of second mortgage loan options, the criteria for approval is based predominantly on both strong credit, low levels of household debt, and substantial demonstrated income.

What many homeowners may not be aware of is that there are other lending options available. The mortgage industry classifies lenders into three broad categories which include:

A lenders– The Banks which require at least a credit score of at least 650 and substantial household income to qualify for most mortgages. Homeowners, borrowers are also put through rigorous mortgage stress tests to qualify for a bank-provided mortgage.

B lenders- Trust Companies and Credit Unions which require at least credit scores of 550 and are also expecting substantial household incomes and additional financial assets to qualify for mortgage financing.

C lendersPrivate lenders which can provide mortgage financing despite poor credit and non-traditional household income such as freelance, contract-based or self-employed.

What Criteria Are Aurora Private Lenders Looking For?

For those Aurora homeowners with damaged credit, seeking private mortgage loan financing may be the route to take. There are established private lenders available in the area to help facilitate private mortgage financing when homeowners have turned away from other lending options due to bad credit.

Unlike the banks that base mortgage loan applications on demonstrating strong credit and easy-to-calculate, significant household income, private lenders will base mortgage financing on an appraisal of your home. These lenders will base the amount of financing on:

  • The current appraised value of your home
  • The location of your home
  • The current state of your property including any fix-ups or underlying issues
  • A private lender will also calculate the Loan-To-Value (LTV) which is a measure of the loan amount based on what equity is available, appraised value, and amount owing on your first mortgage. Generally, a private lender will lend out up to 75% LTV which represents 75% of the current value of your home
  • The degree of equity in your home– you will need to demonstrate more than $70,000 in equity to obtain private financing

Like anything in life, being prepared and gathering any necessary documentation is invaluable when seeing private mortgage financing. Take the necessary steps to be well informed for a potential meeting with a lender. 

  • A list of additional assets that you may have besides your primary residence.
  • Paperwork proving all sources of monthly income including investments income, contract income, self-employed income sources, and child/spousal support monthly income.
  • A recent appraisal on your property
  • 2 Years of NOA’s if applicable
  • The clarity in terms of what type of private mortgage financing you will most likely be needing.

Mortgage Broker Store Can Negotiate Different Types of Second Mortgage Loan Options

With access to a broad network of well-established and experienced private lenders in Aurora, Mortgage Broker Store can connect an interested homeowner to private lenders to discuss various refinancing options.

We will also be able to negotiate private financing directly, depending on your specific financial objectives. Poor credit and non-traditional income need not be a barrier to obtaining a bridge loan or any other loan to help pay off any pressing monthly liabilities. Don’t hesitate to contact us at your convenience to discuss the best options to suit your unique financial needs. 

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